(Yicai Global) April 19 -- Overseas investors have plenty of room to increase their holdings in China's stocks and bonds, according to the country's foreign exchange market regulator.
The securities held by foreign investors still make up a small amount of the total, Wang Cunying, a spokesperson for the State Administration of Foreign Exchange, said a press conference yesterday. China's all-round opening-up provides a very good policy foundation for cross-border capital flows and balanced development of cross-border investment, she added.
Overseas institutional investors bought a net USD9.5 billion of listed-companies' shares and USD19.4 billion of their bonds in the first quarter, according to SAFE's data. Foreigners own just 2 percent of publicly traded stocks in China and 3 percent of bonds.
Net inflows of capital will still mostly reflect the opening up of the securities market for some time to come, Wang said.
The SAFE will support institutions, such as securities firms and fund companies, to participate in the foreign exchange market. It will also back innovations in foreign exchange derivatives and introduce more types of options products.
The global economy and international trade slowed in the first quarter, she said. While the Chinese economy continues to run within a reasonable range, it has maintained an overall stable performance while securing progress. The yuan exchange rate has also been stable and cross-border capital flows remain steady, with supply and demand in the foreign exchange market basically balanced.
China is expected to keep a broadly balanced current account and generally stable cross-border capital flow for its international balance of payments this year, Wang added.